1
EXHIBIT 10.42
PARALLEL EXIT AGREEMENT
THIS PARALLEL EXIT AGREEMENT is made and entered into effective the
17th day of July, 1997, by and among PACKAGED ICE, INC., a Texas corporation
(the "Company"), XXXXX X. XXXXXX ("Xxxxxx"), X.X. XXXXX III ("Xxxxx") and
XXXXXX X. XXXXXXXXX ("Xxxxxxxxx") and SV Capital Partners, L.P. (the
"Investor").
WHEREAS, the parties hereto are desirous of setting forth certain
matters with respect to the transfer of their common stock in the Company (the
"Common Stock").
NOW, THEREFORE, for and in consideration of the premises, and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the following defined
terms shall have the meanings as set forth hereinbelow:
"Adjusted Pro Rata Share" shall mean a fraction, the numerator
of which is the number of Fully-Diluted Shares held by a shareholder
participating in a Subject Sale, and the denominator of which is the total
number of Fully- Diluted Shares held by all shareholders participating in a
Subject Sale, excluding the number of Fully-Diluted Shares held by each of the
participating shareholders who elect not to sell their entire Pro Rata Share in
a Subject Sale.
"Common Stock" shall mean the Company's $.01 par value common
stock.
"Fully-Diluted Shares" shall mean the Company's outstanding
Common Stock, after giving effect to all outstanding warrants, options, rights,
stock-splits, adjustments, convertible securities, and the like.
"Insider Shareholders" shall mean Xxxxxx, Xxxxx and
Xxxxxxxxx.
"Investor" shall mean SV Capital Partners, L.P.
"Pro Rata Share" shall mean a fraction, the numerator of which
is the number of Fully-Diluted Shares held by a shareholder participating in a
Subject Sale, and the denominator of which is the total number of Fully-Diluted
Shares held by all shareholders participating in a Subject Sale.
"Subject Sale" shall mean any sale or disposition for value of
Common Stock of the Company beneficially-owned by an Insider Shareholder (other
than a sale to the general public for cash that is registered under the
Securities Act of 1933, or an unsolicited open market sale for cash effected
through a securities broker at such time as there shall exist a bona fide
public market for the Common Stock), if, immediately after giving effect to
such Subject Sale and to all other sales and dispositions of Common Stock made
by said Insider Shareholder (whether or not such sales or
2
dispositions are subject to this Agreement) since and including the first day
of the calendar year in which such Subject Sale is to be made, said Insider
Shareholder's beneficial ownership of the Company's outstanding Common Stock on
a fully-diluted basis would be decreased to an amount which is less than 95% of
the amount of such ownership as of the opening of business on the first day of
the calendar year in which such Subject Sale is to be made.
2. PARALLEL EXIT. No Insider Shareholders will participate as a
seller in any Subject Sale, including, but not limited to, a sale to the
Company, without causing the purchaser in such Subject Sale to offer the
Investor the opportunity to participate in such Subject Sale on the same terms
and conditions and on a pro rata basis as Insider Shareholders with respect to
shares of Common Stock (and rights or other securities exercisable for, or
convertible or exchangeable into, Common Stock) held by such Investor. The
Investor who elects to participate in such Subject Sale shall be entitled to
sell his Pro Rata Share of the number of shares the purchaser is willing to
purchase. Provided, however, in the event a participating shareholder chooses
not to sell his entire Pro Rata Share, the other participating shareholders
shall have the right to sell their Adjusted Pro Rata Share of the shares of
Common Stock which the participating shareholder does not choose to sell. Each
Insider Shareholder shall give Investor at least ten (10) days prior written
notice of any Subject Sale. Investor should provide the Company with the
number of Fully-Diluted Shares which the Investor desires to sell as part of
the Subject Sale at least two days prior to the Subject Sale. Each Insider
Shareholder participating in such sale must then sell all shares offered by
Investor as part of the Subject Sale as a condition to complete such Subject
Sale.
3. TERMINATION. This Agreement shall continue in effect from the
date of execution until the Company has completed an initial public offering of
its Common Stock, on a firm commitment basis with a nationally recognized
underwriter, resulting in aggregate offering proceeds of $7,500,000 or more,
before deduction of underwriting discounts and expenses of sale.
4. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and benefit the parties hereto and their respective successors and assigns
(including each transferee of any party's Common Stock); provided, however, no
transferee of Common Stock in a public offering registered under the Securities
Act of 1933 or in an unsolicited open market sale effected through a securities
broker shall be bound by or entitled to the benefits of this Agreement. As
used in this Agreement, the terms "Insider Shareholders" and "Investor" shall
include any transferee of such a person, as appropriate, who is bound by and
entitled to the benefits of this Agreement under the preceding sentence.
5. LAW GOVERNING. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF TEXAS.
6. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall together constitute a single agreement, but
shall be effective only at such time as all parties have executed a counterpart
(but not necessarily the same counterpart) of this Agreement.
7. AMENDMENTS. This Agreement may be amended, and any provision
hereof may be waived, only by a written agreement executed by the Insider
Shareholders and the Investor.
2
3
8. LEGENDS. The Company will cause each certificate that
evidences any securities or stock that are subject to this Agreement to bear a
legend substantially like the following legend, which shall be typed, printed,
or stamped thereon in a conspicuous manner:
"The shares evidenced by this certificate are subject
to a Parallel Exit Agreement dated July 17, 1997, among the Company
and certain of its shareholders. The Company will furnish to the
record holder of this certificate (without charge) a copy of such
Agreement upon written request therefor to the Company at its
principal place of business or registered office."
The Company agrees that a counterpart of this Agreement shall be kept at the
principal office of the Company and shall be subject to the same right of
examination by any shareholder of the Company, in person or by agent, attorney,
or other designated representative, as are the books and records of the
Company.
9. NOTICES. Any notice or other communication provided for
herein or given hereunder to a party hereto shall be in writing and shall be
deemed to have been duly given if signed by the party giving it. Notice shall
be deemed effective upon delivery by hand, or on the third (3rd) business day
after it is deposited in the United States mail, postage prepaid (registered or
certified mail), or on the business day after it is sent by Federal Express or
similar overnight service to the addresses of the parties as set forth herein,
or to such other addresses as a party shall provide to the other parties in
accordance with this Section.
10. ENTIRE AGREEMENT. This Agreement sets forth the entire
agreement between the parties hereto relating to the subject matter herein, and
shall supersede all previous agreements between the parties hereto relating to
the subject matter herein.
(SIGNATURE PAGE FOLLOWS)
3
4
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
INSIDE SHAREHOLDERS
---------------------------------
Xxxxx X. Xxxxxx
---------------------------------
X.X. Xxxxx III
---------------------------------
Xxxxxx X. Xxxxxxxxx
INVESTOR:
SV CAPITAL PARTNERS, L.P.
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
PACKAGED ICE, INC.
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
4
